Financial Reporting and GAAP Compliance
It’s a whole new ball game when you go public.
Taking the big step from private to public company brings with it a host of new and complex financial reporting processes, rules, regulations and risks.
Not only will you need to disclose things like executive compensation in your proxy statement, your financial statement disclosure requirements will also increase dramatically. Public company disclosures are governed by generally accepted accounting principles (GAAP) and by the Securities and Exchange Commission (SEC). If your company is in a highly regulated industry, you may be subject to even more disclosure requirements.
GAAP and SEC disclosure requirements
Required GAAP disclosures include accounting changes or errors, asset retirement and insurance contract modifications. Even if your company is completely GAAP-proficient, you may find everything changes once you go public since you’ll also have to be familiar with SEC interpretations and present company information accordingly. It’s almost like another layer of compliance.
Disclosure doesn’t necessarily stop there. Some companies voluntarily disclose substantially more to provide a better basis for investor decision-making, including things like the overall health of the company and management’s analysis of company information.
Timing is also critical. Your quarterly 10Qs, annual 10Ks and annual reports have to be filed with the SEC according to a strict schedule. And, if your company is an accelerated filer, you’ll also be subject to the rules and regulations of the Sarbanes-Oxley Act of 2002.
Advisors who help you navigate change
If you’re considering going public, our consultants will sit down with you to understand your goals and timeframe. Next, we:
- Assess what you need to do versus what you have in place
- Evaluate your internal resources’ skills against what’s required
- Help you construct a realistic IPO readiness road map for financial reporting and GAAP compliance
Going public can be an arduous process. At RSM, it’s more than theory. We know what it takes to be a public company.